Nearly four years ago, the health and hygiene conglomerate Reckitt spotted an opportunity to help establish the next generation of consumer brands through its own corporate venture capital arm called Access.
At the time, the team, led by Rakesh Narayana, gm of Access VC, saw that most consumer venture funding was flowing toward traditional food and beverage consumer brands and not categories like sexual health and hygiene, which Reckitt is dedicated to. Reckitt owns brands like condom brand Durex, feminine hygiene brand Queen V and sexual wellness brand KY. Additionally, there was a dearth of brands serving or being led by people of color, coupled with a growth in better-for-you brands. Since its launch, Access VC has invested more than $50 million in over 30 startups, including sexual wellness brand Maude and men’s wellness brand Asystem, across pre-seed to Series C rounds and beyond.
Narayana spoke with Glossy about Access’s “swords and shields” investment focus and philosophy, the role investors have in promoting diversity and inclusion, and the reason so many beverage brands are reaching out to him.
How do you evaluate brands you’re considering investing in?
“We look at brands through a swords-and-shields [lens]. What I mean by that is that, to be a successful brand in the market today, brands have to have certain shields, like [conscious] environmental footprints, fossil fuel emissions and labor policies. Shields are what we call ‘minimum requirements’ to be a successful brand. Swords are more like whether there are one or two things that a brand truly champions and stands out for. It can be sustainable packaging or LGBTQ rights, it can be on the spectrum of societal or environmental impact, it can be anything. We look for this sword, which is whether a brand has a strong point of view on something.
This thinking has evolved over the years, and we’ve come to find that B Corp is a good model by which to evaluate brands. When a brand goes through B Corp certification, you realize they’ve thought about this work quite a lot. It’s another filter [for us to assess]. That’s not to say we only invest in B Corps, but it’s a big part of our thesis.”
What product categories are exciting to you right now?
“We’re interested in sexual health, femtech and menopause brands. Menopause is a big space. But we’ve also explored natal care and are excited by a lot of innovation there. There’s also a whole space around diversity and inclusion. There are quite a few companies focused on traditional ethnic herbal medicines like Traditional Chinese Medicine and Ayurvedic Indian herbal medicine. But the Black community is massively underrepresented. There are almost no African herbal medicine companies in the world. That’s quite striking if you think about the fact that there is a lot of herbal medicine in Africa, and that it’s popular among the community there.
Healthy aging is another massive focus. It’s never been a [visually attractive], Instagram-friendly category. But it’s strange because, when you look at it in terms of spending power and people who are most interested in their own health and lifestyle, it’s actually quite a large portion of the market. But you go to Walmart or CVS, and [their supplements] brands have not had a packaging refresh in decades. We’re also looking at what comes with aging, like incontinence, and how you can continue to live your life as you get older with no compromises.”
Why are categories like healthy aging of interest to you?
“There is an urban myth that the real problem with the world is overpopulation. But rather, it’s a population imbalance, where countries end up with more older people and fewer young people because people have fewer children. That creates massive tension on governments and society to support elderly care, which is obviously expensive. Self-care, when you’re older, is thus more relevant and essential today than ever.”
What role do you think investors have in advancing underserved categories moving forward?
“Investors have a large role to play in this space, but they play a very small role today. Historically, the majority of venture capitalists are financial engineers. They worked in banking and finance, like private equity, and come over to venture capital to start investing in consumer brands. Don’t get me wrong, I’m sure they have excellent knowledge of consumer brands. But they see the world sequentially. [They ask] ‘Is there a big market in the beverage space?’ And then say, ‘Yes, it’s quite large. [Let’s invest in] a cool interesting beverage brand.’ But if you look at the history of sexual health or healthy aging and how many startup brands have been successful in this space, the data will show very few. So then, there is not much to vouch their funding as financial engineers. We don’t invest in food and beverages, but I have more food and beverage companies reaching out to me than companies in any other category. It’s the nature of the industry, because there tends to be a herd of sheep mentality.”